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26 Jul 2000 : Column 246WH

Education SSAs

12.59 pm

Dr. Vincent Cable (Twickenham): I raise an issue, in one of the last Adjournment debates of the Session, that is of enormous interest to my borough of Richmond and to many others, especially in big cities such as London and Manchester. The problem arises from a combination of factors. A large volume of cross-border flow of pupils in schools, which has been facilitated by the Greenwich judgment, has been combined with the absence of recoupment of costs arising from big differentials in standard spending assessment allocations. My estimate, which no one has contradicted, is that the way in which the formula operates in my own small borough effectively costs it about £2.2 million.

The matter has been raised before. A few years ago, I secured an Adjournment debate on the Greenwich judgment, which was responded to by the Minister of State, who was subsequently promoted to Secretary of State for Trade and Industry. Although he gave no ground on the Greenwich judgment, he understood that the financial implications were difficult, and in subsequent discussions with me and my hon. Friend the Member for Richmond Park (Dr. Tonge) he undertook to ensure that his officials discussed with borough officials how some of the financing aspects might be dealt with. The conversations petered out with his departure, but it was understood that there was a problem.

Similarly, my hon. Friend the Member for Sutton and Cheam (Mr. Burstow), whose borough has a similar problem, suggested that recoupment should be included in the Learning and Skills Bill. Perhaps the Minister present today, who dealt with that matter, accepted that there was an issue, but did not believe that that was the proper way to deal with it. Ministers and officials have been sympathetic, but to date the problem has not been followed through. I shall try to set out the arguments in a little more detail in the hope that we can make some progress on the matter.

The problem is the result of three separate developments in education policy, each of which makes sense on its own, but which create considerable anomalies when they interact. The first is the Greenwich judgment. I do not want to use the debate to repeat arguments about the Greenwich judgment. Many of us have made the case for repeal, but we accept that the Government, like the previous Government, will not move on the matter, and there is no point in banging our heads against a brick wall.

However, it is worth reiterating why the matter causes a problem in a borough such as mine, which genuinely believes in the Government's dictum of education, education, education. It spends more than its SSA and attaches great value to local schools. However, local children were passed over for places in especially favoured--not selective, but none the less especially attractive--schools in favour of pupils from outside the borough. That causes enormous resentment, and much of my case work relates to that matter, including extraordinary cases of parents using long tape measures to calculate exactly how close they are to the school compared with people from outside. The key point is

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authorities' inability to give their own residents preference even when they have paid over the odds in council tax. That anomaly causes resentment. However, I accept that this is not the context in which to pursue that debate.

The second element of policy, which is more directly relevant to today's debate, is the abandonment of recoupment that took place under the previous Government. I am not entirely clear about why that happened--it may have been for administrative as much as political reasons--but it clearly presents a problem when substantial numbers of pupils cross borders. In my case, 40 per cent. of our secondary and 12 per cent. of our primary population come from outside the borough. As 123 per cent. of resident pupils are in local schools, an enormous net receipt of pupils is involved, but that happens mainly as a result of migration from authorities with substantially lower SSAs. Richmond's SSA is £3,181; Hounslow's is about £500 more than that, at £3,629; and Wandsworth's is about £1,000 more, being an inner-city allocation, at £4,158. That is important, because many of the pupils have substantially greater educational needs than the local population, but they do not bring the money with them to meet those needs.

The evidence is partly anecdotal, but some of it is hard. For example, Wandsworth's primary schools come, I think, 126th out of 150 English authorities in the Government's league table of standard assessment tests at the age of 11. My borough is top, apart from the City of London and the Scilly Isles, which are both small authorities. Primary pupils are coming into our secondary schools far behind in levels of literacy and numeracy. There is nothing wrong with that--pupils as individuals are welcomed into the schools and the teachers accept the challenge of teaching them--but they are not funded appropriately in terms of the SSA formula. The money does not follow the pupils.

In Wandsworth's case, that is compounded by the fact that, for ideological reasons, it has chosen to maximise the use of selection in its system, within the permitted limits. One could argue that authorities such as mine have to pick up some of the problems associated with such a divisive system.

Clearly, migration within boroughs is a common phenomenon. It is a complex, two-way process. My borough exports substantial numbers of Roman Catholic pupils to Catholic schools in the neighbouring borough of Hounslow, and that is welcomed. It does not present a financial problem for Hounslow, as its SSA is higher than ours. The pupils come from primary schools at which they have already achieved, by the age of 11, an exceptional level of attainment. Hounslow has no problem accommodating children from our borough--the problem is entirely a result of migration from low-SSA areas.

There are problems with the Greenwich judgment and the absence of any recoupment. Those two decisions--one legal, one administrative--were made under a previous Government. A third problem arises from decisions made by this Government under what are admirable schemes such as excellence in cities, single regeneration budget schemes and education action

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zones. I welcome such initiatives but, as the Minister will acknowledge, they are administered according to educational need as defined by borough.

In my borough, we have schools with serious educational problems as a result of taking in a substantial number of pupils from inner-city boroughs nearby, but which are not recognised as eligible for special treatment under the schemes. One school in Richmond Park has 44 per cent. of pupils with free school meals. It has many of the characteristics of an inner-city school, but would not be able to apply for the excellent Government initiatives. In my constituency, Hampton community college is ambitious about raising standards, and has a large number of pupils from Hounslow. Many of them have serious educational needs, but the college struggles with a limited budget to provide remedial education to bring 11 and 12-year-olds up to a good standard. It is not funded appropriately. If schools were judged on their merits, rather than on the basis of borough characteristics, such schools would be in receipt of special funding arrangements.

I shall talk about some of the ways in which the anomalies might be rectified. Like other boroughs in the same position, at present the borough simply has to cope. Essentially, it has to redistribute funds within its school budget, which is about 5 per cent. above SSA, to accommodate the extra problems. The borough is also told that it has to try to find savings from the 15 per cent. of the budget that is not passported to schools. I am sure that the Minister is aware that there are anomalies within the formula.

The 15 per cent. non-passported budget includes such non-bureaucratic items as transport used for special educational needs and the purchase of special educational needs services from the independent sector, as often arises for autistic children. Money that could, at least in theory, be used for special purposes and diverted away from what pejoratively might be called the bureaucracy is used for special educational requirements, and is not divertible in such a way. The scope for redistribution within the existing budget is limited.

What could be done to reform the problem? First, one could reopen the Greenwich judgment, but I do not propose to pursue that line of argument. Secondly, I ask the Minister whether there is any scope for a fresh look at recoupment, although I realise that I am provoking the reply that we do not want yet more paper chasing, in a system that the Government are trying to make more streamlined and less bureaucratic. I understand the administrative reasons why they do not want to reintroduce recoupment. There are anomalies in recoupment because it operates for special needs, not mainstream, pupils. Could we not have a limited system of recoupment where there is an exceptionally high level of cross-border movement of pupils, particularly severe disparities in SSAs, or a combination of the two? Could it not be linked to the Greenwich judgment so that boroughs that wish to take advantage of that judgment to gain access to a neighbouring borough's schools accept the need for recoupment within a geographically limited area? Those are all ways of limiting the scope and the bureaucratic complexity of any arrangement. Will the Minister reflect on whether recoupment can be brought back on the agenda?

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The third possibility is whether the Government's new schemes, such as excellence in cities, can be extended to cover specific schools that have problems arising from the arrangements. The criticism is often made of my borough that we are trying to create an enclave of middle-class, professional educational excellence and to keep out underprivileged pupils from other boroughs. That is not the case. The teachers to whom I talk about the issue would welcome a diverse intake and take it as a professional challenge. They are not trying to dodge responsibility for relatively underprivileged pupils but ask only that they should be properly resourced to do that job properly. At present, they are financed entirely on the basis that their intake is indeed a professional, middle-class, largely white population, but that is no longer the case in many schools. It would be enormously helpful if the Government could think of a way of enabling individual schools to access those schemes.

To put that in a wider context, I was shown yesterday the report of a commission that was set up in Islington, which is now ruled by my party. It undertook an imaginative project in collaboration with the Labour opposition, chaired by Professor Tim Brighouse. One of the outcomes of that report is the proposal to adopt a pan-London, rather than just a borough-based, approach to educational under-attainment. I am sure that my own borough would accept that it is truly--not just geographically--part of London and should play a role in raising the standards of London education, providing that it can be integrated within schemes that are rather narrowly focused in financial terms.

My final point--I hope that I will not exceed my 15 minutes--is whether there is any scope for the Minister to look at SSAs. I know that she has been pressed by low-SSA boroughs such as Gloucestershire and Coventry to examine whether there are grounds for lifting the floor of SSAs. That principle could be applied in London, where there are specific problems. That would not be discriminating in favour of authorities, such as mine, that have to cope with cross-border migration. That may need to be considered. There is a disparity of at least £1,000 in the SSA between boroughs in outer London, not just in areas such as Richmond but in Hillingdon, Harrow and inner-London boroughs. At the extreme, the disparity can be as much as £2,000, as between Richmond and Lambeth.

I accept that, on the grounds of social justice, deprived areas must have higher SSAs--that is right in principle and I do not question it--but I question whether it costs £2,000 more to educate a child at secondary level in Lambeth than in Richmond. Those areas are, after all, in the same pool for recruiting teachers, especially head teachers, and it costs the same amount, for instance, to repair a drainage system in either set of schools. Lambeth and other comparable authorities can access other schemes. Will the Minister consider the disparity between SSAs in outer and inner London? Will she consider raising the SSA for outer London boroughs, bearing in mind the cost problems?

Will the Minister consider the problem that I have described, which I have put in the context of Richmond's needs, but which also applies to other outer boroughs, which have identical problems? Will she give a broad indication of how the Government might ease the problem, and pursue the matter in more detail in her Department?

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1.15 pm

The Minister for School Standards (Ms Estelle Morris ): I acknowledge the sincerity of the comments of the hon. Member for Twickenham (Dr. Cable), who has written to my Department on a number of occasions. The matter under discussion is important to him, in terms of the Greenwich judgment and the financing of the London boroughs. Clearly, I accept that it is an important issue for his constituents. Although the end of term has passed, I want to put on record my appreciation of the work of schools in his constituency during this academic year. I hope that next year is also successful for those schools.

The hon. Gentleman raised some important issues, and I shall sum up my answers with a few noes and one or two maybes. Underlying all that, I acknowledge that he has raised some issues that we need to grapple with in the future. However, I fear that I shall sit down in 10 minutes' time without having mapped out a way forward or having left him a happier man than when he arrived in the Chamber. Perhaps we will be able to work out an agenda on which progress can be made during the next couple of years.

The hon. Gentleman acknowledged that the Greenwich judgment has been discussed before, and he will know our arguments on the matter. My constituency is on the border with Solihull, so in some ways I share his problems. He painted a picture of parents wanting choices for their children and measuring the number of yards from a particular school with a tape measure. My advice bureau on Friday was full of parents who had done exactly that. I suspect that parents simply want a good school, and not necessarily one that is in their borough. If such a school is just outside the borough, they will not choose one in their own borough. Parents choose a school, in their own borough or elsewhere, because they perceive it as a good school.

The argument about the effects on financing for the borough are for politicians and not parents. The Greenwich judgment was introduced because parents want good schools. Of all the criteria in relation to oversubscription, the use of a boundary, which can be elastic, often does not make sense to individuals who live on either side of the road. It is perhaps not the most appropriate option, and I am grateful that the hon. Gentleman did not pursue it too energetically.

On recoupment, the hon. Gentleman was right to say that the previous Government changed it for an administrative reason, not a political one. I do not want to hold out much hope of revisiting it, because of its bureaucratic nature. Clearly, there had to be a number of head counts--of children in the relevant local authority and other local authorities--along with billing and chasing up the money. I have been led to believe, on more than anecdotal evidence, that the amount of paperwork that went from LEA to LEA, in the process of trying to get the money back, was a wonder to behold. Some LEAs had still not received the recoupment five years after they had spent the money. For Richmond, it would be more worrying never to get the money than to get less money on time. Both outcomes are unsatisfactory, but I can understand why the previous Government chose simplicity. I recognise the element of

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rough justice. The previous Government decided to fund special educational needs children on statement because that was an element of rough justice too far.

A number of issues need to be explored, and the problem to which the hon. Gentleman refers may not be as bad as he thinks. Those children who need the most expensive education--that attached to a statement--will receive the costs of the statement; it is not done through the recoupment process. I am not familiar with Richmond and its boundaries, but it is not always true that children in one part of a borough that neighbours another borough share the characteristics of the borough in which they live. One of the reasons why the next borough might be funded more handsomely than Richmond is that, as a whole, it has more children with needs of the type that we are discussing. One can barely tell when one leaves my constituency and enters Solihull, as the housing is alike in both areas. The environment does not change at the boundary as one crosses from borough to borough, but gradually as one moves through the borough. Although the children in the neighbouring borough may get more money, their level of need for education may not be significantly greater than the children in the borough to which they move. The startling figures may not reflect the extra costs according to the need of the child.

The underlying assumption, which the hon. Gentleman is bound to make--and that is not a criticism--is that the SSA reflects a need. I do not believe that it does. That is the area in which there is an element of rough justice. If I thought that the different SSAs in each of the London boroughs represented genuine need, I would be more worried than I am. As he knows, the Green Paper, which will be published at some time during the summer, deals with ways of funding schools and the formula that we use.

I speak with no prior knowledge, because announcements about the formulae have not been made and I do not know sufficiently well the details of the indices of deprivation in the boroughs that the hon. Gentleman has named. However, it may be that, in a new system of funding, the disparity between neighbouring boroughs is not as great as it might be. He suggested levelling up the funding of the worst funded boroughs. I do not know what the Government will decide to do. I suspect that a disparity of funding between neighbouring boroughs, which is hard to justify in terms of deprivation or need, may solve itself to an extent and that Richmond may end up a net gainer. Work that we are doing on SSAs may, coincidentally, help with the problem.

I also have sympathy with the hon. Gentleman on the issue of areas of deprivation within areas of relative affluence. That is caused not only by children who may be imported from other boroughs and bring a change in circumstance with them. Some urban and rural areas are simply like that. I have always had sympathy with hon. Members who raise that point, and I hope that we can deal with the problem. In introducing initiatives such as excellence in cities or education action zones, we focused on boroughs that had high numbers of free school meals. Most boroughs that have been part of excellence in cities, which is a popular and successful initiative, have free school meals for 30 per cent. or

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more. The hon. Gentleman would argue that Richmond's need was greater, and he mentioned that one school had 44 per cent. free school meals. Clearly, if that school was a borough in itself, it would have qualified for excellence in cities in the first round, and not only in the expansion of the scheme.

The hon. Gentleman may be interested to know that, when we expanded excellence in cities after the Budget, we extended it to part of a borough in the north-west. The borough itself did not qualify for excellence in cities on the basis of free school meals, but part of that borough was hugely disadvantaged. Not only one school, but a collection of six or so secondaries and several primaries--almost a small borough--had a level of need that earned it a place in excellence in cities. In Solihull, which the hon. Gentleman will agree is a fairly affluent borough, there is a pocket in the north called Chelmsley Wood, which has a free school meal rate of more than 30 per cent. in its three secondary schools. Only this week, we were able to work with Solihull to ensure that only that northern part of the borough benefits from some of the initiatives to which the hon. Gentleman referred. The Government were right to focus extra attention on the boroughs that need help most and suffer acute deprivation. We can develop the programme to focus on clusters of schools that need extra support, as we want to direct help where it is most needed, when resources allow.

There will be no return to the Greenwich judgment. I do not think that a return to recoupment would be popular with local authorities. It is not that they are not funded--it is merely the way in which the children are counted. Funding is provided for the children who are educated by an authority, rather than simply for the children who live in the area. I point that out so that nobody who reads the Hansard report of this debate will think that children from outside are not funded. The issue in Richmond is that some are underfunded in respect of the relative amount that is provided under the SSA. That does not provide the solution, although help may be at hand as SSAs are reconsidered, which could knock the unfairness out of the system.

I should like also to offer some hope for the future, although I hope that the approach will not be interpreted incorrectly in relation to a specific school getting help next year. I ask the hon. Gentleman to reflect on the way in which the Government have rolled out their policies and strategies to help schools in challenging areas. I hope that we will move in the not-too-distant future from helping whole LEAs to helping clusters of schools that are in need. I think that I have offered some alternative routes that do not directly involve the inequity of funding in connection with the movement of children between boroughs. Other Government policies have been established in order to achieve what the hon. Gentleman wants to achieve--not to fund children in accordance with a notion of an unreal entitlement or by another system that does not reflect reality. We want to fund children, local authorities and schools on the basis of need. As our policies roll out, we may be able to help clusters of more deprived schools in areas of relative affluence.

I hope also that one of the most important aspects of excellence in cities in areas that border Richmond, and from where children are imported, will be to raise standards in schools. I return to my first point: parents

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want to secure education outside their own borough simply because they perceive that schools are better there. Part of the challenge is to stop that by changing the reality of schools in some of the underperforming areas, and by changing parents' perception--one has to come after the other. When excellence in cities and education action zones are successful, schools in the home boroughs will become higher achieving schools. It is a stated aim of the programme that parents will choose to educate their own children in their own borough because it offers them the standard of education that they want.

This is a genuine issue. Nothing irks parents and local politicians more than feeling that their children get a raw deal from a rough formula--an issue that it is entirely legitimate to raise. During the next few months or years, as our policies roll out and the Green Paper is launched, the hon. Gentleman may want to pursue the matter, either in writing or through other contact. In response, I shall want to ensure that, as far as possible, any new systems that are introduced get rid of the anomalies. However, I hope that he will accept that this is not about revisiting decisions made in the past and building in even more anomalies. It is about rolling out new policies that can address the real need: funding children for what they need, regardless of where they live.

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